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Kenwood, USADR In DAR Agreement

Kenwood has become the first CE manufacturer to commit to developing terrestrial digital audio radio (DAR) receivers for sale in the U.S.

The company signed a technology and marketing agreement with USA Digital Radio (USADR), which plans in the summer to launch field tests of an in-band/on-channel (IBOC) technology that lets AM and FM broadcasters use their existing frequencies to deliver digital programming.

The Kenwood agreement follows the signing of technology and marketing agreements with three of the big five broadcast equipment manufacturers to speed the technology's market entry, said USADR president Robert Struble.

Field tests with equipment from these companies will be held throughout the country on AM and FM bands. USADR hopes to complete them by the end of the year, Struble said.

USADR's technology is incompatible with a rival IBOC technology developed by Lucent, which hasn't yet announced technology agreements with CE makers. But Lucent has reported agreements with two major broadcast-equipment manufacturers and began field-testing in April, a spokesman said. Lucent hopes to wrap up the tests in December.

For its part, Kenwood said it is shooting for first quarter 2001 availability of an IBOC home or car receiver. The car receiver would probably be designed like its Eureka-technology DAR receivers sold in Canada and Europe. They plug into DAR-ready head units through their CD-changer inputs, said mobile VP Bob Law. An IBOC receiver for the U.S. might cost a little less than the Eureka receivers' $1,000, he said.

USADR is majority-owned by radio networks operating 1,600 of the nation's 12,500 commercial and nonprofit AM and FM stations in 192 of the 268 Arbitron-rated radio markets, said USADR marketing director David Salemi, who claimed broadcaster ownership will "break the chicken-and-egg syndrome." The investors include the country's top nine radio networks.

Another 500 stations, many of them in small and mid-size markets, want to adopt the technology, he added. Those stations include AM stations interested in converting back to music programming because of the enhanced fidelity offered by digital, he said.

IBOC technologies promise to deliver FM stereo quality on the AM band and "virtual CD quality" on the FM band, said Struble.

Struble believes the FCC, in a planned rule-making proposal due sometime this summer, will seek lab- and field-test results of the competing formats by the end of the year. He hopes the FCC will then choose a single standard for terrestrial DAR.

Once a rule-making proposal is adopted, he said, "in the late third quarter or early fourth quarter of 2000 we expect stations to put IBOC on the air, and in the first quarter of 2001 receivers will be ready for purchase."

USADR will recommend that the FCC not mandate a conversion timetable as it did with DTV. "We see this as market-driven," said Struble. "From our marketing studies, we expect that within two years, 30% of AM and FM stations will convert because of the relatively modest price [between $50,000 to $200,000]."

Because IBOC technologies enable broadcasters to simultaneously transmit analog and digital versions of the same program, analog radio might never disappear, he speculated. "Analog could be around forever because of all of the clock radios."

During the transition stage of simultaneous analog and digital broadcasting, digital broadcast coverage will at least equal that of analog coverage and might actually be better, Struble said.

During the transition phase, Salemi explained, digital broadcasting will restore coverage lost by co-channel interference. In addition, IBOC service will reduce first-adjacent-channel and second-adjacent-channel interference that could also reduce a signal's reach within a given market, he said.

IBOC will also be more resistant to multipath interference and will eliminate FM background hiss.

The USADR-Kenwood agreement will enable engineers from the respective companies to work together to develop aftermarket car and home receivers. "On the marketing side, we'll work together to build consumer demand and work with retailers," Struble said. Kenwood already manufactures Eureka-format terrestrial digital radios available in Europe, he noted.

This month USADR will open up talks with retailers to prepare them for the technology's launch.

USADR has also talked to all automakers, but Struble said he doesn't expect terrestrial DAR technology to appear in factory-installed radios for another three or four years because of automaker product-design cycles and because "the OEMs want to see aftermarket demand first."